Praise for Finance team

July 1, 2009

Dear Sir,

I would like to congratulate Minister Paula Cox and her staff in the Ministry of Finance, Mr. Wayne Brown, Mrs. Shawna MacKenzie, Ms Laura Semos and Mr. Denis Simons of the Treaty Unit for their rapid and diligent action in negotiating Tax Information Exchange Agreements (TIEA) and bringing Bermuda onto the so-called OECD "white list".

International business is now our dominant income earner and almost all of our financial wellbeing depends on its success. I would argue that even with tourism, upwards of 75 percent of our business is actually the result of international business. It is truly our "bread and butter". The threat by the G20 countries and the OECD remains the biggest threat to Bermuda's long term future. If they are able to close down Bermuda as an international business centre, our financial future will be grim.

The initial shot in this direction by the G20 was the unexpected requirement that so called offshore centres should have signed TIEAs with at least 12 OECD countries. Bermuda was close but not quite there. Twelve TIEAs had been negotiated but changing standards of the OECD left Bermuda on the so-called "grey list". In short order, Minister Cox and her team have negotiated and signed sufficient agreements to become the first jurisdiction to get off the grey list. In addition they have negotiated TIEAs with Canada, Germany and Japan (the first low tax jurisdiction to do so wit that country) that are awaiting signature.

In 1978 Bermuda signed a TIEA with the US, the first such exchange of information agreement of its type. It was a revolutionary step and there is little doubt that this agreement contributed greatly to Bermuda's subsequent success in international business. In fact it was one of Sir John Swan's greatest achievements as Premier.

It is good to see Bermuda secure its rightful place on the "white list" – something that many of our competitors have been unable to achieve. In their quest to raise taxes and close down low tax jurisdictions such as Bermuda, we can expect the G20 countries to continue to raise the bar, probably in an arbitrary way, but as long as Bermuda keeps ahead of the game we should be all right. Thankfully, Bermuda's team in the Ministry of Finance seems intent on doing just that.

ALASTAIR MACDONALD

City of Hamilton